Which of the Following Statements Is Correct

question 29

Multiple Choice

Which of the following statements is correct?

• A) Preventing errors during processing should not be an important objective of every accounting system.
• B) Preventive controls can be applied to each transaction during normal processing to avoid errors occurring.
• C) To be effective, controls over transactions should only include detective controls.
• D) The purpose of preventive controls is to discover fraud or errors that may have occurred during transaction processing.

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Definitions:

Full-Scale Production

The phase in manufacturing where products are produced at the maximum capacity following the completion of pilot runs and testing.

New-Product Development

The complete process of bringing a new product or service to market, from concept creation and development to commercialization.

Test Marketing

The process of launching a new product or service in a limited market area to evaluate its potential before a wider release.

Simulated Test Markets

A marketing technique where consumer reaction to a product is tested in a simulated environment prior to its actual launch.